When a realtor and a buyer work on finding a home, there does not necessarily have to be a contract, but this is not the case with realtors and home sellers. In these cases, a written contract is mandatory and this is something that must be paid attention to. You must read over your contract thoroughly because you do not want to violate any of the terms that are put for in it. You must be able to understand your legal rights, so call a lawyer to discuss it if there is anything that you do not truly understand.
The content of the actual contract will depend on a number of different things, but it will usually include the policies that are common in your particular area. You are able to negotiate everything on this contract, so go over it completely and do not be afraid to question everything that you do not agree with These are some of the basic things that will be on most of these contracts:
1. Term of the Agreement. This is the length of time that the agent has to exclusively list the home. The longer the agreement is, the longer the agent has to make the sale. If the market is weak, then you will be fine with a long-term agreement, but in a strong market, you should not need one and you will not want to be committed to someone who cannot sell your home. You are able to extend the contract if you are satisfied with the effort that the agent has put in on your behalf.
2. Commission. The terms of commission are negotiable, but are generally decided by a standard percentage. This amount will vary, depending on the realtor or company, but it usually between 5-7%. You are able to negotiate, but will not be able to go too low, especially in a hot market. The lower the percentage, the more money you keep on your sale, but a higher percentage may persuade the agent to spend more time on your home. Other agents will know what type of commission you are giving, which could lead them to try to get involved with your sale come renegotiation time.
3. MLS. Most listing agreements will include a clause that posts your house on the Multiple Listing Service. This allows for your home to reach a very wide range of buyers, which is a major advantage and is one of the reasons why people use realtors. Many of these databases are available directly to the buyer on the internet, giving you another reason to get involved with a realtor who posts on this database. The MLS gives you the best chance of selling your home quickly, so take advantage of it today.
4. Lockbox. Whenever you are selling a home, you will want to give your realtor access to the home when you are away and this is done through a lockbox. This is basically a tiny safe that is placed on your property that holds a key to your house, giving the realtor access to show your home. If you do not like the idea of people being in your house, then do not allow the realtor to use a lockbox. If you do use a lockbox, remember that strangers will be in the home, so you may want to hide any valuables. Remember that you have a better chance of selling if you allow more people to view the property, but also keep in mind that there is a small risk that something may go missing when using a lockbox.